Election results: Outlook the day after

First some local comments and then a broader National view on the elections last night. So called Liberal California defeated the Proposition to legalize Pot. It could have contributed tax money some estimate in the Billions, to alleviate a shortfall in tax receipts, but it didn't pass. So I don't want to hear anymore about "liberal California" or phrases like "Left Coast." If we were so liberal we would have passed the legalizing pot measure!

Jerry Brown beat Meg Whitman for Governor and Barbara Boxer held her seat for a 4th term. I expected Boxer to win but not Jerry Brown. I personally liked Meg Whitman because she was smart, a very good person and had good common sense. She was perceived not as warm and friendly and approachable for people, but any who knew her, know that she just wasn't a typical politician and she wasn't a phony. She was and is a genuine person who I have a lot of respect for. I knew her when she worked at Bain & Co. at the same time Mitt Romney also was at Bain. I like him a lot too and he is very smart. Bain & Co. was my client for many years and they had a crop of Senior Partners that were and are brilliant.

Nationally, the election unfolded as was expected. The Republicans won the House in a big wave taking many moderate Democrats with them and returning those States to the Republican control. The Tea Party had a respectable night getting about 50% of those races they were competing in. But what does this mean for the country going forward, as the Senate remains in Democratic control? It means that many problems will remain unsolved. If you are looking for legislation coming out of the House that will reverse Obama's policies, it isn't going to happen. The Senate will not pass anything the House sends over, that the Democrats don't believe in, just like the 420 bills the Republicans stopped from passage in the Senate with the filibuster. There is a short window to pass some key legislation from those 420 bills awaiting Senate approval, if the Democrats push some in the lame duck session. But that will take some guts. And I don't know if they have found their balls yet. Maybe Sen. Harry Reid did, as he was reelected for 6 more years, and he doesn't have to worry much now about reelection.

Time will tell but I don't see much changing by the politicians. I see gridlock, not the good kind, but the bad kind.

Market comments for the week

I did not write much this week and you might be wondering why. Some thought because the market hasn't gone down that I didn't want to post but they would have been wrong with that assumption. The real reason was that there wasn't any real news or market change to post. A week ago on Oct. 22nd, the Dow closed at 11,132 and the S&P500 closed at 1183. Yesterday, the Dow closed at 11,118 and the S&P500 closed at 1183 again. You see you could have been on vacation and not missed a thing.

Let's take a look at the charts of the Dow and S&P500 below. You will see clearly we went nowhere and it appears one of two things are happening. The Bull's story goes something like this: We are building a firm base here to go higher after the election. The Bear's story on the other hand goes like this: We are hitting strong resistance at these levels and are unable to break above them. But after the election when it is obvious as to the results, the market will drop on the news (Buy on the rumor and Sell on the news). You can see the horizontal resistance lines in both charts. To me the 200 day averages will be key going forward if there is any correction. If we break below them, the markets will have a meaningful correction. Without a break below that level, the market manipulators are still smoking something because this rally is not warranted in this economy.


I am in the camp of selling on the news and I'll tell you why. This election cycle is no mystery. The Democrats will lose the House but it won't be a complete wipeout of 100 seats, but more like 55, and the Senate will remain in Democratic hands with a slim majority. All the surveys point to this outcome, so the bets have been made and the wager will be collected after it is official on Wednesday. So, no real news yet to move the market this past week. Next week will be a different story as market direction may be more clear. Personally I have been waiting for a major correction so long now I am almost getting tired of saying it. This has been a long extensive run up in the Bear market rally.

Market comments for Oct. 25th

Are we all excited today to see that the G-20 ended their Finance Ministers session agreeing to "try" no to do harm to each other? Traders seems thrilled today as the Dow is up about 65 points at this hour and going above the 11.200 level I said we would get to back in mid September and it may even go to the 52 week high of 11,258 before the elections.

However, I caution all you believers that this is a real Bull market Rally that Friday was the lowest Volume day since last December. When can you remember an October where Volume was so low? I can't! The Volume has disappeared this month and the Volatility Index is hitting lower lows each day, it seems, although today it is up a bit. About 10 days ago it was as low as 18. From a historic perspective, it has been much lower over the past 10 years. It was as low as 10 from about 2005-2007 and signaled the quiet before the storm which followed. In 2008 it soared to 90. So we are by no means at the lows on the VIX. But there seems to be a quiet before this election and many analysts believe that the election is already baked into the market and most likely it will selloff just when the news is in on the results. You know, it's that old "buy on the rumor and sell on the news, game.

Obama wins! It took all of us to put the Country back on track

This is an emotional evening for me as I wasn't sure where the voters were going to hang their hats. Survey's are one thing but the actual vote is the ultimate decider. Were they going to disappoint me again, or were they going to return home. Not since JFK have I been excited in a Presidential election. What has haunted me is this? Even as the country has experienced a stock market crash, and a financial crisis in the Banking and Insurance industry, 28% of the American people approve of the job Bush has done as President. That is an amazing statistic even though he has the lowest approval ratings in history of this survey. Who are these 28% and where do they live? Are they concentrated in one State? Do they live all in a specific area of the Country or are they in fact our neighbors? It is a very scary thought.

It is my State of California which now puts Barack Obama over the necessary 270 Electoral College votes to a total of 275 votes to victory. This election is as much of a mandate for Barack to implement his promises during the campaign. Those commitments include the following:

Getting our troops out of Iraq
Healthcare for everyone
Raising up the Middle Class by creating jobs
Reducing Global warming

God watch over Barack Obama and Joe Biden and God Bless America.

UPDATE 8:35pm PST
I just received an email from Barack. Here is what he said:

Charles --

I'm about to head to Grant Park to talk to everyone gathered there, but I wanted to write to you first.

We just made history.

And I don't want you to forget how we did it.

You made history every single day during this campaign -- every day you knocked on doors, made a donation, or talked to your family, friends, and neighbors about why you believe it's time for change.

I want to thank all of you who gave your time, talent, and passion to this campaign.

We have a lot of work to do to get our country back on track, and I'll be in touch soon about what comes next.

But I want to be very clear about one thing...

All of this happened because of you.

Thank you,

Barack

A new and unique reaction to the Financial crisis of 2008: Class Warfare.

Past election issues, say from 1980-2004, have often been based upon ideological differences. The election of 2004 was based upon Security and who was going to make the Country safer, Bush or Kerry. In 2000, it was about proposed reforms of Social Security and Medicare and whether there was going to be a "lock box" for Social Security as Gore proposed or whether it was better to allow individuals invest their own retirement in the stock market, as Bush supported. (It's a good thing that idea never made it!) The other issue was, who was going to restore integrity and honor to the Presidency, after the Lewinsky matter and the impeachment of the President Clinton for lying turned the Country upside down and divided us into Red and Blue States. Another issue was weather we were going to use the U.S. Military fro "Nation Building". The Clinton Administration did send troops to the Balkans and this was supported by Gore. Bush wanted no Nation Building (in contrast to his desires the last 6 years in Iraq!). Gays in the Military were an issue and the Clinton Don't ask, Don't Tell policy was the policy of the Clinton Administration. Again, ideological issues around morality.

In the 1992 election between George Bush Sr. and a newcomer, Bill Clinton, Bush 1 had a very high approval rating of 89% after the first Gulf War. But that approval rating started dropping, as a mild recession encouraged Democrats there was a chance to win the election and take it away from Bush. Bush emphasized Clinton's lack of Military experience and ensured rumors of Clinton's infidelity took hold in the media. This campaign was as much about Clinton's character as anything else.

The 1988 election between Bush Sr and Dukakis had Bush casting Dukakis as a "proud liberal" that didn't have any Military experience, hence the famous photo of Dukakis in a tank with a helmut on and looking foolish according to the Bush attacks. There were a number of ideological differences between the 2 candidates. Dukakis tried to tie Bush to the scandals of the Reagan Administration, such as Iran Contra. During one of the Presidential debates Dukakis was asked by the Moderator if he supported the Death Penalty and gave Dukakis the situation for him to have as a context, which was that he was to pretend his wife was raped and murdered. Dukakis's answer discussed the statistical ineffectiveness of capital punishment. Rumors were spread that Dukakis's wife burned a Flag in protest of the Vietnam war.

In all of these examples the push for ideological differences is evident. For the first time in my memory, the fundamental difference in this election, is that it is about Class Warfare. There are no more Red States versus Blue States, Liberal versus Conservative. As a result of this unprecedented financial crisis, it's all about the Wealthy versus the Middle Class. Europe's elections have had this debate many times, but this is the first time in this country. Unions in France now have the power as they do in other European countries and in countries in South America as well. It is about empowering the Middle and Lower Class at the expense of the Wealthiest who have enjoyed an unprecedented run of about 30-50 years. Those who are wealthy are are split about this issue. Some believe the wealthiest are reaping the excesses of their failures to ensure all boats should have risen. They are willing to pay more in taxes and think it is fair and often wondered why the Republican Party under Bush 2 was pushing for so many tax breaks they really didn't need. It is a fact, that the gap between CEO's pay and average workers has increased many times fold over the past 20 years. This excess is giving rise to the highest voter participation rate in history. It has mobilized the youth of the country. With an election victory comes a more empowered electorate, just as the Founding Fathers had hoped would happen.

It has been a consequence of the actions and decisions of Presidents like Reagan, Bush 1, Bush 2 and all their supporters, including Corporate leaders who took abusive Salaries, Bonuses and company Stock Options. Those leaders got their Boards stacked with supporters who would approve these excesses and there was a quid pro quo for those serving on multiple Boards. You scratch my back and I'll scratch yours. It is only those Corporations that truly have independent Board members that have a chance to limit excesses.

Even Healthcare companies, who have gone from Non Profit to For Profit Corporations are guilty of these excesses and are responsible for contributing to the high cost of healthcare. Greed drove these leaders to excesses. It might be a way to help reduce healthcare costs if we can get a handle on these excesses, and possibly return them from For Profit to Non Profit once again.

Lou Dobbs made his fame over the issues about jobs being outsourced abroad, illegal immigration ruining Middle Class jobs. War and Peace are still issues in this election as they have been since Vietnam. But because Iraq wants us to leave with in an agreed upon timetable, it is less of an issue than it could have been this time.

The focus the next 4-8 years will be about restoring a Middle Class in America, reigning in excessive CEO compensation, a better safety net for the less fortunate, a focus on real improvement in the education of our youth, and a world that works together because it has to in order to survive. Collaboration and cooperation will be the tools used. Everyone will be asked to sacrifice something for the betterment of all. After this election, the times they are a changing!!! It's now up to you to vote and start this chain reaction for the better! Turn away from the failed policies of the past. Vote for real change this time. Vote your interests not your favorite personality. Vote with courage of the unknown, not the fear that binds us to the past.

Are you ready to exert your power in this Election?

They say Barack Obama is caught between a rock and a hard place regarding the weekend comments by Rev. Wright at the NAACP meeting and other media events. They want us to believe that even though Barack has admonished his former pastor's comments, the American people will blur them together including each of their positions with no distinction. When they still haven't made up their mind who to vote for, they will acquiesce and vote for Hillary. If that is so, then the American people will get who they deserve for President.

It is my firm belief that there is at least 30% of the American people who don't think at all. Those are the ones who still approve of President Bush's policies in Iraq and here at home. They are not worth discussing any issue with as they have drunk the Kool-Aid and now are zombies. Then there are about another 15-17 % that will vote for John McCain because he is a Republican. That gets John McCain to 45-47%. The Democrats have given a majority vote for Barack which gives him about 28% and Hillary has about 24%, with Independents the final choosers in the Fall Election. Many Independents have joined with Barack, as they see a new hope not seen since John F. Kennedy.

The only question that truly remains is the following: Are we going to let the media dictate the issues we talk about during the next 6 months? If so then we will decide the election based upon associations and distractions, rather than substantive issues like the war in Iraq, getting a better Energy policy that helps liberate us from the dependence on Middle East Oil and our own Oil companies, giving tax breaks for Middle and low income people and increasing the tax on the wealthiest, helping to solve the Social Security financial crisis by ensuring it is there for our next generation, paying down the National Debt, solving the home foreclosure and subprime loans problem for so many Americans, passing a GI Bill to help support the troops who have given so much for their country, and so many other issues on foreign policy to help restore America's greatness in the world. This is up to us, not someone else. Change the channel of your TV when you here anything that isn't real issue oriented, with the emphasis on the word REAL! When the media ratings drop, maybe they will do something better, like cover real issues. If you speak to others about the Primary, discuss issues, not distractions. Start speaking out about what you want this election to be about or we all lose. And when we lose, the rest of the world does too. Remember, only we can give power to Swift Boat ads when we listen to them and alter our positions as a result.

UPDATE:

I almost forgot this action. Anyone, in the remaining States to still hold their Primary, should help end this folly, by voting overwhelmingly for Barack Obama. That will at least stop the rhetoric till September.

Fighting for Truth, Justice and the American way

No, it's not Superman, nor is it President Bush nor Alberto Gonzales, Attorney General nor the Congress. It took place in a small Court in Ohio and was fought by average Americans exercising one of their Constitutionally guaranteed freedoms to fight for Truth, Justice and the American way, by serving on Jury Duty.

Ohio Election Workers Sentenced

Wednesday March 14, 2007 12:16 AM


By THOMAS J. SHEERAN

Associated Press Writer

CLEVELAND (AP) - Two county election workers were sentenced Tuesday to 18 months in prison for RIGGING A COUNT OF 2004 PRESIDENTIAL ELECTION BALLOTS so they could avoid a longer, detailed review.

Jacqueline Maiden, 60, a Cuyahoga County election coordinator who was the board's third-highest ranking employee, and ballot manager Kathleen Dreamer, 40, each were convicted of a felony count of negligent misconduct of an elections employee.

Cuyahoga County Common Pleas Court Judge Peter Corrigan allowed the women to remain free on bail pending appeal, but indicated he thought there was a more widespread conspiracy among election officials.

``I can't help but feel there's more to this story,'' Corrigan said.

Ohio law says that during a recount each county is supposed to randomly count at least 3 percent of its ballots by hand and by machine. If there are no discrepancies, the rest of the votes can be recounted by machine. A full hand count is ordered if two random samples result in differences.

Special prosecutor Kevin Baxter said in the defendants' January trial that they worked behind closed doors three days before the public recount on Dec. 16, 2004, to pick ballots they knew would not cause discrepancies when checked by hand, thereby avoiding a full hand recount.

To read the whole story click here.